New study finds "tremendous value" in measures to increase efficiency of light duty vehicles
Thu 22 June 2017 | Back to news list
A new US-based study from the International Council on Clean Transportation (ICCT) finds that improving fuel efficiency of light-duty vehicles according to the adopted 2025 standards and then by 4-6% up to 2030 offers "tremendous value for American consumers". The study evaluates the impacts of the standards on the costs of vehicle technology and fuel savings under low, reference, and high fuel prices.
Under the fuel economy standards presently in place, ICCT says that buyers of model year 2025 vehicles who pay cash will fully recoup their investment in the third year of ownership. Those who finance their vehicles will see a net positive cash flow starting immediately. Moreover, the standards will net consumers thousands of dollars over the lifetime of the vehicle.
Under reference fuel prices in future years, the consumer benefits would be more than three times the costs of the regulation. These findings are robust to changes in market conditions: fuel savings are 2.4 times the costs if fuel prices stay low for the next several decades.
The report says that "fuel efficiency and CO2 standards are an exemplary public policy with benefits that consistently and greatly exceed costs. Consumers directly benefit from the 2025 standards with thousands of dollars in fuel savings per vehicle. These consumer savings alone justify the efficiency standards.
"If the public benefits of the standards for energy security, climate change mitigation, and air quality were also included, the efficiency standards would make for an even bigger public policy win. Continuing these vehicle efficiency improvements to 2030 will continue to provide consumer benefits that exceed the costs—by a factor of 2 to 3 times under reference fuel prices."
The report adds that high consumer benefits are available across vehicle types, from cars to light trucks.
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